Bingo hall profits up in smoke

Oct 31 2007 by Chris Robinson, The Journal

BINGO halls across the North-East could close following a profits warning since the smoking ban.

Players are deserting slot machines and half-time games, which clubs rely on for income, and instead are opting to go outside to smoke.

Four months on from the ban, bingo bosses have also blamed the game’s heavy taxation and predicted that one in three clubs will close.

Mike Higgins, general manager of the Heaton Bingo and Social Club, Newcastle, said taxes on slot machines were unfair.

He said: “Every pound we make on the slot machines is taxed at around 17.5 % VAT and 15 % Gross Profits Tax (GPT) which is 32.5p in a pound we are paying in tax.

“We can’t offer any £2-a-go machines any more and they have taken machines away from us, we are only allowed a maximum of four now.”

Mr Higgins added there had been a big difference in revenue since July 1, when the smoking ban came into force.

Dan Waugh, director of investor relations for the Rank Group, which operates bingo chain Mecca, said there had been a profits warning earlier this month. He said the chain closed 11 of its clubs earlier this year because they were not making enough money.

“We take about 30% of revenue from slot machines and that has been affected by people going outside to smoke,” he added.

“However, a bigger problem is that we have been forced to remove our most popular machines from the club.

“Part of the reason is not just the smoking ban, but also that bingo is the most heavily taxed form of gambling and we just don’t understand the government’s policy.

“The Bingo Association estimates that one in three bingo clubs will close and there has been research to show that when this happens there will be a huge social effect in the community.”

Gran-of-one Lesley Stockdale has been playing bingo for more than 20 years.

The 60-year-old smoker, from Third Avenue, Heaton, Newcastle, said: “I would say the ban has affected a lot of people. They go outside during the breaks whereas before we could walk around the place and smoke and play the games inside.”

A spokesman for the Treasury said the effective rate of taxation faced by the bingo industry is within the same range that applies to lottery duty, gaming duty and machines taxation.

He added: “The Government does not believe the tax system is at the root of the current problems faced by the bingo industry and we are not convinced that there is a tax solution to these problems.”